Chatham Lodging Trust(CLDT) - 2021 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Chatham Lodging Trust reported a Q4 2021 RevPAR of $92, representing a 93% increase compared to Q4 2020, but a 22.7% decline versus Q4 2019 [31] - The company generated total revenue of$ 57 million in Q4 2021, nearly double the $29 million from the previous year [27] - Adjusted EBITDA for Q4 2021 was$ 15.2 million, with FFO per share of $0.12, up from a loss of$ 0.18 per share in the same quarter last year [31][28] Business Line Data and Key Metrics Changes - The Residence Inn in San Diego Gaslamp and Residence Inn Anaheim were among the top producers of GOP in Q4 2021, indicating strong performance in specific locations [28] - The newly opened Home2 Suites at Warner Center has shown promising early results, achieving over 50% occupancy shortly after opening [12][20] Market Data and Key Metrics Changes - Silicon Valley, which comprised almost 25% of EBITDA in 2019, lagged with a RevPAR of $74 in Q4 2021, while occupancy was 61% [21] - The overall portfolio occupancy was 65% in Q4 2021, outperforming the industry average of 58% [24] Company Strategy and Development Direction - The company aims to focus on acquiring high-quality hotels in markets with strong growth potential while recycling capital from lower-tier hotels [35] - Chatham plans to maintain a portfolio that is approximately 80% extended stay, indicating a strategic focus on this segment [47] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of business travel, particularly in tech-driven markets like Silicon Valley and Bellevue, Washington [7][33] - The company has significantly improved its balance sheet, reducing net debt by$ 250 million since March 2020, positioning itself well for future investments [34] Other Important Information - The company has committed to sustainability and corporate governance, forming an ESG committee and participating in GRESB assessments [16][17] - Chatham's capital expenditures for 2022 are budgeted at $23.5 million, including$ 17.5 million for renovations [30] Q&A Session Summary Question: Recovery trajectory in Silicon Valley and San Francisco - Management noted that Silicon Valley and San Francisco have different demand generators, with recovery in Silicon Valley being more dependent on tech companies [38][39] Question: Details on asset acquisitions and dispositions - The focus is on selling older hotels with lower RevPAR while considering acquisitions based on asset age and cash flow potential [40][41] Question: Labor situation and wage growth expectations - The company is in a good position regarding labor and anticipates mid single-digit increases in labor costs for 2022 [42] Question: Drivers of GOP margins in December - The majority of GOP margin improvements were attributed to labor savings [45] Question: Future portfolio reshaping - The company aims to diversify its portfolio geographically while maintaining a focus on extended stay properties [47] Question: Performance of Home2 in LA - The hotel is performing according to pro forma expectations, with positive feedback from guests [50][51]